There’s been much written about the ‘jewellers money laundering scheme’ that was cracked by Jersey Police and Jersey Customs and Immigration Service, but how did it work?
On 10th March 2021, Jersey’s Royal Court sentenced Darius Pearce to a total 7 ½ years imprisonment in respect of money laundering arrangement offences. Mr Pearce was convicted of these offences on 17th December 2020 following a trial before the Royal Court, presided by Commissioner Clyde-Smith and Jurats Blampied and Ronge.
The most complex drug-related and money laundering investigation ever undertaken by the Jersey authorities
Mr Pearce was found to have provided a professional laundering service to a criminal enterprise that was engaged in the importation and supply of controlled drugs in Jersey on a commercial scale.
The surveillance operation targeted numerous persons of interest and lasted several months. The operation culminated in the seizure of MDMA, cocaine and cannabis resin with a street value of up to £919,000, having been imported by boat at Bel Val Bay, St Martin, on 21st June 2019.
The case against him stemmed from a joint investigation conducted by the States of Jersey Police and the Jersey Customs and Immigration Service, known as Operation Lion. It was the most complex drug-related and money laundering investigation ever undertaken by the Jersey authorities and, in order to bring the case to fruition, mutual legal assistance was obtained from the UK and numerous other jurisdictions around the world.
Seven of the subjects of Operation Lion were sentenced by the Royal Court on 23rd September 2020, having pleaded guilty to various drug-trafficking and money laundering offences. Mr Pearce was the only defendant to maintain his not guilty pleas and proceed to trial.
The evidence suggests that this was an ongoing criminal enterprise rather than an isolated importation. In order to fund the operation, members of the enterprise needed to raise sufficient funds to purchase the drugs to be imported into the Island, and to cover their operating costs. What that meant, in practical terms, is that they needed to arrange the movement of cash from Jersey to the UK where the drugs were sourced.
Between March and June 2019, significant quantities of cash were being moved from Jersey to the UK, by numerous members of the enterprise, using a variety of methods. One method was to physically carry cash out of the jurisdiction on a flight or ferry. However, that was an inherently risky tactic, and resulted in losses to the criminal enterprise when the cash was detected and seized by customs authorities. Mr Pearce provided an alternative, and less detectable, method of moving significant quantities of cash to the UK without members of the enterprise having to expose themselves to the risk of being caught in possession of the cash.
Mr Pearce came to the attention of the authorities when members of the enterprise were observed going into his jewellery shop, Darius Pearce Jewellers, in the Central Market in St. Helier. It was subsequently established that he was using his business to facilitate the movement of criminal property from Jersey to the UK through bullion transactions.
His methodology involved four steps.
- Firstly, a sum of cash would be handed to Mr Pearce at his jewellery shop.
- Secondly, Mr Pearce would deposit the cash into his personal and business bank accounts. His preferred method was to deposit the cash in a series of transactions using automated cash paying-in machines (‘PIMs’) rather than over the counter transactions. However, his bank eventually banned him from using the PIMs due to the large amounts he was depositing, which was causing the machines to jam.
- Thirdly, Mr Pearce would use the cash to purchase gold bullion from a dealer based in Hatton Garden in London.
- Fourthly, the gold would be collected from the London dealer and sold for cash.
This laundering method enabled significant quantities of cash to be removed from the Island and provided to members of the enterprise in the UK under the cover of legitimate transactions. It was a crucial part of the operation.
The Attorney General, Mark Temple QC, said: “I welcome the sentence handed down by the Court which again shows that Jersey is committed to combatting money laundering and ensuring that Jersey businesses cannot be utilised for the movement of criminal property.
“The sentence will serve as a deterrent to those who might be tempted to become concerned in this type of offending. It sends a very clear signal that Jersey is not open for business of this sort. Today’s sentencing represents the culmination of a long-running case involving complex legal argument, and collaborative working between prosecutors in the Law Officers’ Department and investigatory bodies in Jersey and numerous other jurisdictions.”